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China is reducing its dependence on foreign technologies

In the first four months of 2022, China’s semiconductor imports fell by 11.4%. An astonishing trend given the global demand, but which can be explained by the desire on the part of the Chinese government to reduce dependence on foreign technologies.

Beijing aims for self-sufficiency

Between early January and late April 2022, China imported 186 billion semiconductors according to official customs data. Even if it’s huge, it’s less than over the same period in 2021: a decrease of 11.4% year-on-year. The country is implementing a self-sufficiency strategy, to reduce its dependence on foreign technologies while imposing strict health measures, which have paralyzed the industrial sector.

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Since late 2020, amid economic concerns and a trade war with the United States, China has been stockpiling semiconductors so as not to run out. Beijing is also stepping up its efforts to achieve self-sufficiency in semiconductors, by investing in the sector. A few weeks ago, the South China Morning Post reported, from Hong Kong, the existence of a real bubbling of the Chinese world of semiconductors.

The Chinese government, with the support of private companies, is investing heavily in the semiconductor industry. A proactive policy is being pursued in this direction. Subsidies, advantages on supply, preferential policies, sparked an investment boom and could eventually encourage the emergence of major local suppliers. By 2020, 50,000 semiconductor-related enterprises had been established.

Can China dominate the semiconductor market?

According to a report by the American Association Semiconductor Industry Associationthe country’s semiconductor sales could reach a 17.4% share of the global market by 2024, which would make China one of the largest chipmakers in the world, after the United States and South Korea. However, China’s ambitions are currently thwarted by a shortage of talent and technology needed to develop advanced chips.

In this regard, Taiwan is trying to prevent China from poaching its semiconductor experts. In the sights of Chinese spies: the Taiwan Semiconductor Manufacturing Company. Several Chinese companies are suspected of illegally recruiting Taiwanese engineers. A Taiwanese intelligence official said that 27 companies have already been raided and their owners were summoned for questioning by the office.

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